Entrepreneurship rate remains low in Minnesota

Last year, Minnesota had 230 entrepreneurs for every 100,000 residents. Thirty-seven states and the District of Columbia had a higher rate than that.

Nationally, there were 320 entrepreneurs for every 100,000 people.

This isn’t a new development. Minnesota has scored poorly on the index for years.

There also appears to be something going on regionally: Other states with low entrepreneurship rates include Wisconsin, Iowa, Illinois, Indiana and Michigan. (North Dakota and South Dakota are in the middle tier among the states.)

Theories abound for why Minnesotans are less likely to make the leap into business ownership.

Some complain that state and local governments haven’t started the multimillion-dollar seed capital funds for start-ups that other states including Ohio and North Carolina have had in place for years.

Others say this is a cultural issue, that Minnesota self-starters don’t get the same level of respect they get in places such as Silicon Valley.

Maybe the issue involves something else. Feel free to comment with your own theories about this.

2 comments

With the Obama making up penalizing rules weekly, I feel most business people want a secure environment to work, and they feel the electing of radial politicians hostile to business make their situation worse.

Example – Gov. Dayton’s closing of state government last year. Lots of jobs were lost, contractors were deprived of their rightful payment and exceptions of finishing the projects and getting paid were dashed (and no profit this year guys).

There are other states that appreciate business and want entrepreneurs to come (like S. Dakota and Texas.)

If you look at what the foundation counts as a new business it includes many things driven by population growth like contractors building houses. This would make states with stable or declining populations appear to have lower rates.

The study does not do a good job of looking at rates of entrepreneurs in business likely to create multiple jobs, which would be more interesting to policy makers.

I emailed the study author last year about this and it was confirmed. Unfortunatley there are not accurate data sets that would allow them to slice the data better.